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'Gas guzzler' tax probed

2005-08-29 13:10

John Oxley

Firstly, who will it benefit?

Obviously not those who drive vehicles which use a lot of fuel - and I'll list the worst offenders later.

They already have to pay more per km than anyone else for the privilege of driving these vehicles by the simple fact that they use more fuel.

That also means they're already paying more fuel tax than anyone else.

It also won't help the fiscus in the long run, unless the additional taxation (we'll still have to see how they're going to implement that) is so onerous that it makes up for the revenue "lost" from those who switch from thirsty to more economical cars.

It certainly will NOT help the motor industry, which makes more profit on luxury vehicles - 4x4s, MPVs and super sedans - than it does on the economical family cars which make up the bulk of its sales.

How would it help?

So how is it going to help South Africa?

Of the fuel used in this country, about 28% is provided by Sasol, our oil-from-coal giant. However, as its prices are based on an international parity formula, we don't benefit AT ALL from Sasol fuel in terms of cutting pump prices.

However, we do benefit from the fact that this means "only" 72% of our fuel is imported.

Theoretically, if we cut down on the amount of fuel used by "gas guzzlers", this will reduce the amount of fuel that has to be brought into the country, and thus help our balance of payments.

Good move.

But by how much? And who?

The worst "gas guzzlers" (actually most of them use diesel, not "gas" the American term for petrol) are trucks.

One of the best ways of cutting down on fuel used by trucks is to get some of them off the road.

Railways

An obvious way would be by redeveloping the railways network and making it more attractive and cost efficient than road transportation.

But that's a long-term process that will require massive dedication and investment by Transnet. Let's put that aside for now.

So do we tax trucks more? Clearly not, as that would lead to a huge knock-on effect in terms of inflation and the overall cost of living.

So that leaves luxury vehicles.

Or does it?

Most family cars these days average around 10 litres/100 km in overall fuel use, including commuting and longer journeys.

Let's add another 20% to allow for the 6-million or so older vehicles on our market that are not as fuel-efficient as the more modern ones.

Sliding scale

So let's say 12 litres/100 km is the starting point, and we then have a sliding scale of extra taxes depending by how much you exceed the "zero rated" target.

How many vehicles will it affect?

There are 1 155 passenger and light commercial vehicles listed on sale in South Africa.

  • 445 of these use less than 10 litres/100 km.
  • 334 use between 10 litres/100 km and 12 litres/100 km.

That leaves 376 vehicles that use more than 12 litres/100 km.

  • 211 fall between the 12 -14 litres/100 bracket.
  • 87 use between 14 and 16 litres/100 km.
  • 28 use between 16 and 18 litres/100 km.
  • 49 use more than that.

Of the 1 155 total 178 are light commercial vehicles, some of them 4x4s.

The rest are sports cars, leisure vehicles (including 4x4s), MPVs, hatches and family saloons.

So what does all this mean?

  • 38% of all new passenger cars and light commercial vehicles listed for sale in South Africa use less than 10 litres/100 km.
  • 67% use less than 12 litres/100 km.

Although 4x4 models are often blamed for "gas-guzzling", there are only 180 models on the market which use more than 12 litres/100 km of fuel.

48 of these are "working" single cab pickups used by farmers, public utilities, and so on, while another 25 are double cab 4x4s usually driven by families.

The 4x4 market

Although 4x4 sales have grown in the past few years, many of these would not fall within the realm of "gas-guzzlers", especially given the growth of economical diesel-powered vehicles.

So what is left?

Most people affected by a fuel consumption tax would be those who have either expensive luxury cars or 4x4s..

However, I believe they comprise less than 10% of the passenger vehicle market, and I doubt whether additional taxation would make them use less fuel.

For most, it would simply be another cost that gets offset against taxation, usually via a company fuel account.

And for the life of me, I can't figure out an equitable way of collecting the new tax, or of policing it.

So it's back to the drawing board, I'm afraid!

The worst 10

Lamborghini

Murcielago 6.2 Coupe 4x4

25ll100km

Rolls-Royce

Silver Seraph AT

25

Ferrari

575 M Maranello AT Coupe

23

Rolls-Royce

Corniche AT Cabriolet

23

Rolls-Royce

Park Ward AT

23

Nissan

Patrol 4.8 GRX 4x4 Tiptronic

22

Toyota

Landcruiser 100 GX 4.5 4x4

21

Nissan

Patrol 4.8 GL 4x4 MY05

21

Ferrari

456 M GTA Coupe AT

21

Toyota

Landcruiser PU 4x4 MY00

20

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